Another MUST READ article about METMINCO!
http://www.smh.com.au/business/metminco-dresses-up-for-the-copper-party-20110330-1cf7a.html
Metminco dresses up for the copper party Barry FitzGerald
March 30, 2011
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Ivanhoe Mine's executive chairman Robert Friedland has long been a super bull on the outlook for copper. In fact, his bullishness on the red metal knows no bounds.
And so it was last week in Hong Kong where Friedland told the Mines and Money conference that the earthquake and tsunami that devastated north-east Japan was "insanely bullish for copper".
Friedland said the "orgy" of reconstruction � currently estimated to cost more than $US300 billion � meant that copper remained the "cutest girl at the dinner".
Advertisement: Story continues below But the truth is that copper was been the top pick amongst the commodity forecasters long before Japan's twin horror hit. And forecasts for a continuation in copper's golden era continue to pop up here, there and everywhere.
Overnight there was Evy Hambro, chief manager of BlackRock's $US17 billion World Mining Trust, saying in London that supply/demand fundamentals for copper are "very supportive of today's pricing environment".
And in Singapore, Brook Hunt analyst Julian Kettle, told Bloomberg that copper � already just shy of record levels - will lead a rally in base metals this year as increased consumption in China reduced inventories.
He reckons that the fundamentally tight market means that copper prices in 2011 could average $US4.40 a pound � a 28 per cent increase on last year's average.
Increasingly, people are asking where is the copper to meet demand going to come from? Little wonder too, given Friedland's neat primer that between 2007 and 2030, the world is likely to consume 620 million tonnes of the stuff as the emerging markets electrify. compared with the 585 million tonnes consumed in the 106 years to 2006.
So we are going to need a lot more developments like the monster Oyu Tolgoi copper/gold project in Mongolia where Ivanhoe, with the backing of Rio Tinto, is spending $US7.5 million a day to get the mine to the starting stalls in 2013.
It's against that background that locally listed exploration copper stocks with a shot at the big-time can look forward to what unfolds in 2011 with more confidence than you'll find elsewhere in the resources sector.
One stock that falls in to that category is Metminco (ASX:MNC), last mentioned by Garimpeiro back in October when it was trading at 24 cents a share. It has since motored on to 36.5 cents, a gain of 52 per cent.
It owns the Los Calatos copper/molybdenum deposit in Peru's Sanchez Cerro province, at relatively low altitude for that part of the world and some 160 kilometres from the port of Ilo.
The deposit was upgraded last year to 926 million tonnes grading 0.37 per cent copper (3.42 million tonnes of copper) and 0.027 per cent molybdenum (253,000 tonnes). Give the moly a copper value and you are looking at an average copper equivalent grade of 0.51 copper (4.7 million tonnes of copper equivalent), which is the going rate for existing mines in the region.
Metminco is well funded for a major infill/extensional exploration program at Los Calatos this year, remembering that Los Calatos is but one of eight high priority targets it has in the region.
As it already stands, Los Calatos and surrounds is the sort of project that gets the likes of BHP Billiton, Anglo American, Vale and China's state-owned enterprises excited. And there has been some noise on that front.
But Metminco has the chance to create much more value for its shareholders before looking to cut a deal with those that you might call the more natural owners of a project of Los Calatos' scale. That's what this year's aggressive drilling program is all about.
All that is well understood by the market but you would not know it from the lack of institutional investors on the Metminco share register. The problem from their viewpoint is that Canada's Barrick Gold has a buyback right to 51 per cent on certain Los Calatos tenements.
But there is a strong whisper that Metminco is close to cutting a deal with Barrick that would remove the buyback right, giving the institutions what they want to see � 100 per cent ownership by Metminco.
Metminco is also planning to strike a deal with its partners in its over-looked copper and gold projects in Chile to move from 50 per cent to 100 per cent control, again giving the institutions what they want.
Given current market valuations for Metminco are necessarily based on 49 per cent ownership of Los Calatos and 50 per cent of some of its Chilean properties, it will be interesting to watch what happens when it gets to 100 per cent of all of its key assets, making itself all that much more cuter.
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